Procter & Gamble’s chief executive officer David Taylor is going out on a high note — the company has posted another consecutive quarter of net sales growth during the pandemic.
P&G said on Thursday evening that Nov. 1, Taylor would transition to become P&G’s executive chairman, and that vice chairman and chief operating officer Jon Moeller would step into the CEO role.
On a Friday morning media call, Taylor said that Moeller is an “outstanding” leader, and that is the right time to transition the executive team. In addition to Taylor and Moeller’s shifts, Shailesh Jejurikar has been elected chief operating officer, effective Oct. 1.
Taylor said the team was a “very strong group of business leaders, market leaders and functional leaders that are working very well together. That’s a good time to transition, as you’re going from strength to strength.”
“[Jon] comes from a deep financial background, but he’s been chief operating officer for several years, and even before that was the chief financial officer, Jon worked with me and the leadership team in all the categories,” Taylor said. “He understands and supported the increased investment we have in media and innovation.”
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P&G’s stock jumped on Friday, and Wall Street analysts said they were not surprised by the CEO transition.
Barclays analyst Lauren Lieberman said Moeller’s appointment signaled “continuity of a strategy that is already working well” for P&G. She noted that Moeller has been “front and center in P&G’s turnaround over the past decade” and that he has been “instrumental in crafting P&G’s organizational structure changes which emphasize that there is no ‘one size fits all’ business model for categories and geographies.”
Lieberman said it’s likely that Moeller’s appointment means that P&G’s business leaders will continue to be empowered to determine strategy and business models, and that resourcing and reinvestment decisions will continue to be made at the category level.
Stifel analyst Mark Astrachan said that he views “Moeller as integral to the company’s strategic shift (sales acceleration, market share increases and productivity programs) in recent years,” and that “his ascension indicates current initiatives are likely to remain in focus.”
P&G has done well during the pandemic, as consumers stocked up on essential products. For fiscal 2021, P&G saw 7 percent net sales growth, to $76.1 billion in sales, up from $71 billion the prior year. Net earnings were $14.35 billion, up 10 percent from the prior year.
Beauty sales increased 8 percent to $14.4 billion, and grooming sales jumped 6 percent, to $6.4 billion. Skin and personal care sales increased due to innovation, increased pricing and the growth of SK-II, P&G said. Taylor said on the company’s earnings call that SK-II is “healthy,” and grew 13 percent, despite the slow travel retail market.
Hair care sales gained slightly, with increased pricing offset by lower sales in emerging markets.
In grooming, shave care sales were up, but the pandemic caused “consumption decreases,” P&G said. Appliance sales were also up, due to premium product launches and increased pricing.
Taylor said the segment’s growth — which had been stagnant as competitors like Harry’s and Dollar Shave Club emerged — has been driven by its diversification. “We’re no longer a wet shave business, we’re truly a grooming business with growth in wet shave, dry shave, which we call appliances, we’re also growing in many of those new areas, like IPL, the intense pulse light area,” he said.
For the fourth quarter, P&G posted a 7 percent net sales jump, to $18.9 million. Net earnings were $2.9 billion, a 4 percent year-over-year increase. Beauty sales jumped 11 percent from the prior year, when people were more focused on essential items, to $3.5 million. That trend is in line with the U.S. prestige market, which saw 66 percent growth in the second quarter of the year, according to the NPD Group.
Grooming sales increased 10 percent, to $1.67 billion.
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